The exchange rate index is a weighted average of the exchange rates of the pound sterling with a variety of other currencies.

Question

Quizplus · Accepted Answer

The exchange rate index (also known as the effective exchange rate) is indeed a weighted average, designed to measure the value of a currency (like the pound sterling) against a basket of other currencies. This helps in assessing the overall strength or weakness of the pound in international markets.

The Exchange Rate Index Is a Weighted Average of the Exchange